Venkataswamy v Kadoor - [2023] NZHC 2419

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2016-404-002374

[2023] NZHC 2419

BETWEEN
SHYLA VENKATASWAMY

Plaintiff

AND

MURALI GANESH KODOOR and GEETA MURALI GANESH

Defendants

Hearing: On the papers

Counsel:

N J Scampion and M A Ashmore for Plaintiff M I S Phillipps for Defendants

Judgment:

1 September 2023

JUDGMENT OF ANDREW J

This judgment was delivered by Justice Andrew on 1 September 2023 at 4.00 pm
pursuant to r 11.5 of the High Court Rules 2016 Registrar / Deputy Registrar
Date ………………………….

VENKATASWAMY v KODOOR [2023] NZHC 2419 [1 September 2023]

Introduction

[1] In my judgment of 18 May 2023, I ordered that the defendants were to pay to the plaintiff the sum of US$634,641, together with further equitable relief.1 The equitable relief and costs in the proceedings are yet to be determined. I have directed a separate remedies hearing to deal with the outstanding issues. My judgment is the subject of an appeal by the defendants to the Court of Appeal and a cross-appeal by the plaintiff.

[2] In an earlier interlocutory judgment of this Court, dated 2 November 2022, Associate Judge Sussock ordered that the defendants were to pay NZ$400,000 into the plaintiff’s solicitor’s trust account as an interim payment with the funds to remain in the plaintiff’s solicitor’s trust account until further order of the Court.2

[3]The defendants now apply for the following orders:

(a)A stay of execution of my judgment of 18 May 2023, pending determination of the appeal by the defendants to the Court of Appeal and the determination of the cross-appeal by the plaintiff to the Court of Appeal and until further order of this Court;

(b)That the sum of NZ$400,000 (together with accumulated interest) paid into the trust account of the solicitors for the plaintiff by the defendants and pursuant to an order of this Court dated 20 February 2023 remain in the plaintiff’s solicitor’s trust account pending the outcome of the appeal and further order of this Court.

[4]There is a cross and related application by the plaintiff for release of the

$400,000 interim payment currently in her solicitor’s trust account.

1 Venkataswamy v Kodoor [2023] NZHC 1189.
2 Venkataswamy v Kodoor [2022] NZHC 2737.

Factual background

[5] There is a lengthy history to this litigation set out in my judgment of 18 May 2023. In that judgment I found that the plaintiff had proven her second and third causes of action, namely breach of trust and breach of fiduciary duty. The defendants, as fiduciaries, were in breach of their duties to account to the plaintiff for substantial funds, namely a total of USD $998,551, that she had entrusted to them for investment in real estate in New Zealand.

[6] The plaintiff lives in California, USA. The defendants, old friends of the plaintiff, reside in New Zealand. All the parties are Indian nationals.

[7] The funds at issue were advanced by the plaintiff to the defendants in 2010 and…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2023] NZHC 2419
Decision Date: 1 September 2023

CaseChat Overview and Summary

The defendants, Murali Ganesh Kodoor and Geeta Murali Ganesh, appeal against the High Court’s judgment of 18 May 2023, in which the Court ordered them to pay Shyla Venkataswamy the sum of US$634,641. Venkataswamy cross-appeals the refusal to order the release of the interim payment of NZ$400,000 held in her solicitor’s trust account. Venkataswamy and the defendants are Indian nationals residing in California and New Zealand, respectively. The defendants, who were trustees, misused funds entrusted to them by Venkataswamy for real estate investments in New Zealand. The defendants applied for a stay of execution of the judgment pending the appeal and cross-appeal, as well as for the release of the interim payment held in Venkataswamy’s trust account. The Court considered the factors relevant to granting a stay of execution, including the apparent strength of the appeal and the overall balance of convenience. The Court found the defendants’ financial position overstated and the plaintiff’s situation more challenging. The Court concluded that the balance of convenience favoured the plaintiff and that the Court of Appeal could do justice between the parties if the defendants made payment now, regardless of the appeal outcome. The Court also granted the plaintiff’s cross-appeal for the release of the interim payment. The Court further ordered that the defendants pay the plaintiff the security for costs they provided and that the plaintiff be refunded the security for costs she provided, with interest. The plaintiff is awarded costs on both applications on a 2B basis plus disbursements.

The defendants’ application for a stay of execution of the judgment is dismissed. The plaintiff’s application for the release of the interim payment of NZ$400,000 from her solicitor’s trust account is granted. The Court orders the defendants to pay the plaintiff the sum of $14,050 paid as security for costs and that the plaintiff be refunded the sum of $12,000 paid as security for costs, with interest. The plaintiff is awarded costs on both applications on a 2B basis plus disbursements.

Orders